How to calculate marketing ROI

By doing this, a company can determine if the money spent on advertising and other marketing efforts justifies the additional income it has generated.

Marketing campaign costs in the calculation should include the cost of employees involved in the campaign, advertising space purchased, and any research that helped determine the marketing strategy.

When these numbers are totaled, they are subtracted from the increased sales profits. The resulting number typically represents your ROI. An example of this could be a company that spent $100 on marketing and, in return, gained $1000 in sales.

When the cost is subtracted from the profit, there is a $900 return, translating to a return on investment of 900%.

Some companies break down their sales increases into two categories to determine ROIs. A product's sales increases are separated into both organic and marketing aided.

The natural trajectory of a product may account for some of the increase, and that percentage would be separated from the profits directly attributable to the marketing campaign. The result is a true ROI.